Business

Stricter export rules await some Mass. tech firms

David Mills, a federal official, said the rules replace Cold War ones.
Jessica Rinaldi/Globe Staff
David Mills, a federal official, said the rules replace Cold War ones.

NORTH READING — New federal rules will make it easier for many Massachusetts technology companies to sell products overseas, but those that make particularly sensitive technologies, such as components for advanced radar, face tighter restrictions on their exports.

Some of state’s biggest companies, including Raytheon Corp. of Waltham, Analog Devices Inc. of Norwood, and Macom Technology Solutions Holdings Inc. of Lowell, must receive State Department approval to export equipment that uses their high-frequency radar technologies, under rules that went into effect late last year. That’s because these technologies can detect stealth aircraft — designed to fly undetected by traditional radar — and could end up in the hands of terrorists or hostile nations, US officials said.

The tighter restrictions will probably slow sales, said Dennis Farrell, the director of global trade compliance at Analog Devices, which acquired the radar technology company Hittite Microwave Corp. in Chelmsford. “It’s just more work,” Farrell said. “Your sales cycle is longer.”

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The changes in export rules are important for Massachusetts because of the state’s abundance of companies that develop and sell cutting-edge technologies — from communications to guidance to detection systems — that have potential military uses. While Massachusetts ranked 18th among states in overall exports last year, it was fifth in sensitive exports controlled by the Commerce Department for national security reasons, according to federal trade officials.

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The new rules, rolled out over the past two years, replace regulations that were “relics of the Cold War,” said David W. Mills, assistant secretary for export enforcement at the Commerce Department. Speaking here Wednesday at a forum organized by the Massachusetts Export Center, Mills told business leaders the goal is to improve exporting by making it safer.

The new rules make it easier for US companies to sell widely available technology by reducing paperwork and simplifying licensing, he said, and allow the State and Commerce departments to focus their oversight on the most sensitive products that, for example, might become parts for improvised explosives used by terrorists.

“It’s the Commerce Department’s position to promote trade,” he said, “and to promote trade it has to be secure.”

Then-Secretary of Defense Robert Gates proposed overhauling export controls in 2010. Gates said the system had become outdated, hurting US companies trying to compete globally while failing to keep sensitive technologies from overseas rivals. “We were wasting our time and resources tracking technologies you could buy at Radio Shack,” Gates said in 2010.

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Mills called on companies to work with federal officials to resolve problems in the export control system and notify enforcement agents about suspicious solicitations. “You are our eyes and ears,” Mills said.

The Commerce Department’s Boston office helped win the 2010 conviction of two Chinese nationals who were illegally exporting from their Waltham company equipment that was used by the Chinese military. In a separate, ongoing case, a grand jury last year indicted a Chinese national and an Iranian for smuggling Massachusetts-made transducers to Iran. They can be used in centrifuges for enriching uranium for nuclear weapons.

Megan Woolhouse can be reached at megan.woolhouse@globe.com.